China and Central and Eastern European Countries: Regional Networks, Global Supply C
China has become leading recipients of foreign direct investment (FDI). Meanwhile, an increasing share of global FDI is going to many Central and Eastern European countries (CEECs). What is the relationship between inward FDI of China and the CEECs? We conceptualize the relationship according to three alternative paradigms: (1) China and the CEECs each exist in its own regional production network, with no linkage between FDI flows into China and into CEECs; (2) China and the CEECs together comprise a global production network, so that China’s FDI is positively related to CEECs’ FDI; and (3) FDI into China is a substitute for FDI into the CEECs, with the correlation being negative. In this paper, we study empirical estimates of this issue for 15 CEECs for 1990-2004 using four different econometric approaches: FGLS with Random effects, FGLS with fixed effects, EC2SLS and GMM. The result supports the conclusion that China's inward FDI does not crowd out CEECs' inward FDI. In fact, it shows that in some regressions FDI flows in these two regions are moderately complementary. Our analysis also confirms the importance for FDI flows of determinants such as market size, degree of trade liberalization, labor quality and a healthy global FDI supply.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
When requesting a correction, please mention this item's handle: RePEc:ris:integr:0483. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.